Frontier SSA sovereign bonds down 3-5pts today and c10-13pts over the last week
Every performing frontier SSA country (excl. REPNAM and SECYHE) now has a benchmark bond with a yield over 10%
Price falls could open-up value in some SSA names assuming relatively unchanged fundamentals but challenge for others
It's carnage for frontier SSA bonds today. Sovereign dollar eurobonds are down 3-5pts (3-7%) at the time of writing this morning for medium term benchmark bonds (or sole issues where applicable) across most of the 14 SSA issuers, according to Bloomberg prices, bar the less liquid REPCON and defaulted ETHOPI (and excluding REPNAM and SEYCHE whose sole bonds are set to mature soon, this year and next, respectively). And this comes after the price falls seen last week. Most bonds have now fallen by c10-13pts (10-15%) over the last week (since 28 March).
For performing SSA, spreads are also wider today, with increases ranging from 70-100bps for Benin, Cote d'Ivoire, Kenya, Nigeria and Rwanda, 120-160bps for Angola, Ghana and Senegal, and 200-220bps for Gabon and Mozambique. Zambia's spread is up 356bps.
As a result, by our reckoning, every performing (non-defaulted) frontier SSA country (excluding REPNAM and SECYHE - so that's 13 of them) now has a benchmark bond with a yield over 10% as of today, now that Benin (BENIN 38s) and Cote d'Ivoire (IVYCST 36s) have gone over (we exclude long duration issues too). Of course, even before last week, a good share of the region's issuers were over 10%, but Rwanda, Benin and Cote d'Ivoire all joined the club in recent days. BENIN 38s are down 3.7pts today (yield up 60bps to 10.4%). IVYCST 36s (which were issued on 27 March) are down 3.9pts today (yield up 70bps to 10.2%). The bond is down 10pts since issue (it was priced at US$97.5 at issue, not par).
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Stuart has over 20 years’ experience as an economist in both the public and private sectors and has been covering EMs since 2000. He joined Tellimer in July 2006 and heads the team of macro and fixed-income analysts. Previously, he worked for the UK government Economic Service and as an Economic Adviser at the Export Credits Guarantee Department.